Pushing the economy off a cliff

May 29, 2020

New Zealand has achieved a new and most unwelcome record number of job losses:

Job numbers fell by a record 37,500 in April 2020, as COVID-19 effects and restricted trading began to impact on the economy, Stats NZ said today.

In seasonally adjusted terms, total filled jobs fell 1.7 percent in April 2020 compared with March 2020, when it was flat.

April’s fall is the largest in percentage terms and by number since the filled jobs series began more than 20 years ago, in 1999.

“With the country in lockdown throughout most of April 2020, the impact of COVID-19 is now being seen in falling job numbers,” economic statistics manager Sue Chapman said.

“Non-essential businesses closed during the lockdown, though some people were able to work from home.”

The government decreed what were essential businesses and permitted them to operate rather than allowing any that could operate safely to do so and this sharp number of job losses is the result.

Stats NZ calculates filled jobs by averaging weekly jobs paid during the month, based on tax data. Filled jobs include jobs paid by employers who are being subsidised by the COVID-19 wage subsidy scheme.

“While a fall in filled jobs does not necessarily mean employment has ceased in all cases, we saw a rise of over 30,000 people claiming the government’s Jobseeker Support benefit in April,” Ms Chapman said. . .

This month’s figures could be even worse with more than 6,500 job losses this week.

The record number of job losses adds credence to Adam Creighton, writing in The Australian, who says no national leader has been as feted as Jacinda Ardern during this pandemic. But while she might have popular support, the facts are she is pushing the NZ economy off a cliff.

New Zealand’s economy is in strife. Without major change, our constitutional cousin is in decline. Its public finances are in tatters, its biggest export, tourism, has been obliterated — Air New Zealand announced 4000 job losses this week — and New Zealand police now can enter people’s homes without a warrant.

“New Zealand is going backwards, falling behind the vast ­majority of our OECD partners in virtually every social and economic measure that matters,” said Roger Douglas, a former New Zealand Labour treasurer and the famed architect of Rogernomics.

New Zealand ranks fourth last in the OECD for labour productivity growth, and last for multi-factor productivity growth, according to economist Michael Reddell, based on OECD data. Health and education are gobbling up more of the budget as the population ages, with less and less to show for it.

That was happening anyway and has been exacerbated by the harder by the lockdown that used the arbitrary criteria of necessary rather than safe in deeming what we can and can’t do.

The country’s Massey University reckons economic activity will tank 16 per cent in the second quarter, while government forecasts pencil in a 4.6 per cent decline this year ahead of an 8.2 per cent rebound in 2022.

“I doubt the economy will bounce back as the government hopes; and the Treasury forecasts, as bad as they are, will prove optimistic,” former NZ Treasury secretary Graham Scott said.

In one year, New Zealand has blown 30 years of hard-fought ­fiscal rectitude. Its public debt will explode from the equivalent of 19 per cent of gross domestic product last year to 54 per cent by 2022, on the government’s own figures.

Successive governments have been criticised for the 30 years of hard-fought fiscal rectitude. How much worse the current situation would be had they not followed that path,

Scott said expanding the deficit, expected to blow out to 10 per cent this year, was the right thing to do. “But looking further out, comparisons with other countries, such as the US and UK, are no basis to justify our large debt ratios; we’re a small, open economy with vulnerable export industries,” he said, noting the share of exports in GDP had been falling steadily for nine years.

That makes Labour’s ban on oil and gas exploration all the more bizarre. With 0.3 per cent of global GDP, New Zealand can only shoot itself in the foot by shunning fossil fuels. The Prime Minister and Finance Minister, who have not worked in the private sector, spruik the totems of modern left governments — renewable energy, trees, higher tax, equality — but without much to show for it. Plans for a billion trees and 100,000 houses have come close to almost naught, and a capital-gains tax was dumped. Labour made a song and dance about reducing child poverty too, but on six out of nine measures tracked by Statistics New Zealand it is unchanged or worse since 2017, including the share of children living in “material hardship”, which has risen to 13.4 per cent. . .

This column had attracted 102 comments when I read it, a couple of days ago including this gem from Alfred:

The world doesn’t need more examples of the progressive social direction of NZ so we can learn from their utter failure sad as it is. She’s all hat and no cattle, just a charismatic executioner of her country’s future prospects. 

Jacinda Ardern has unprecedented praise from around the world for her response to crisis but before the Covid-19 response the government she leads had made little or no headway on its key policy planks.

She, and they, have taken the praise for dealing with the health crisis and must take responsibility for the economic one we now face.

But given they didn’t manage to deliver on their promises in normal times they can’t be trusted to come up with, and deliver on, policies to reverse the economic catastrophe for which their insistence on a harder and more prolonger lockdown are partially responsible.


Rural round-up

March 11, 2019

Silence on the land: Why are NZ Farmers quiet on the prospect of capital gains tax? –  Andrea Fox:

The proposed capital gains tax is a “mangy dog”, Federated Farmers says – but so far it hasn’t provoked much barking in the home paddocks.

Farmers have been almost silent – at least in public – on the spectre of a tax that, according to critics, will add unacceptably high costs and complexity to farmers’ already heavy compliance burden.

But don’t think for a minute they’ve accepted the idea of a tax on land sales.

The suggestion from farmers is that while some feel so hammered by central and local government lately they are shellshocked. Others are more relaxed. That’s because they know Coalition partner NZ First won’t support the recommendations from the Tax Working Group (TWG), for fear of being consigned to political history next year. . .

Aerial “no-till” project set to revolutionise NZ farming:

A successful trial of “no-till” helicropping showcased today in the Southern Waikato promises a step-change in the approach to pastoral farming in New Zealand – ensuring the protection of soils while maintaining productivity.

“We are effectively putting away the plough,” says Sustainable Helicropping Group Chairman, Colin Armer. “The aerial no-till approach means we can establish crops and renew pastures without touching the ground or disturbing precious soil, more like what happens in nature.”

Mr Armer says early results from the $1 million project have proven the potential to address the estimated 192 million tonnes of soil that are lost every year from erosion – according to the Ministry for the Environment’s Our Land 2018 report – 44% of which is from pastoral land. . . 

On the Farm: Our guide to what’s happening in rural New Zealand:

Each week our Country Life reporters talk to farmers and orchardists up and down the country about what’s happening in their area.

Northland’s  kumara need rain.  The harvest is 15 percent through and some moisture would help swell the size of the kumara. The up-side of the dry is it is easy to get them out of the ground.  The crop needs to be harvested by the end of May so there is only limited time to wait for rain and to get through it all.  Kumara have been very expensive in the past couple of years because of a lack of supply and  growers would love it if prices could ease a bit so it’s more affordable for everyone.   

Around Pukekohe the long dry spell continued until Thursday when some scattered showers drifted over the district but our south Auckland correspondent says they may get some “useful precipitation’ from the approaching cold front. He says much of the district’s cultivated land is bare except for irrigated paddocks where brassicas and lettuce are growing or are being planted.  . . 

Meat and dairy up in December:

The volume of meat and dairy product manufacturing rose in the December 2018 quarter, Stats NZ said today.

After adjusting for seasonal effects, the volume of total manufacturing sales rose 2.0 percent in the December quarter. A 4.0 percent boost in meat and dairy product manufacturing led the rise.

“The meat and dairy industry rebounded after a strong fall in the September quarter,” manufacturing statistics manager Sue Chapman said. . . 

If there’s no water what’s the point? Female farmers in Arizona – Debbie Weingarten and Audra Malkern:

By 9am, it’s already 100F (38C). In the desert afternoons, rain gathers on the horizon, teasing – and then it disappears. There is so much heaviness, so much waiting.

I pulled on to the ranch of Anastasia Rabin with Audra Mulkern, a Washington-based photographer and founder of the Female Farmer Project. We were on assignment for a story and chasing a statistic: according to the most recent US census, Arizona is the state with the highest proportion of female farm operators.

Despite the fact that women have always farmed, they have been left out of our agricultural narrative. An incomplete story has real consequences: women have been left off land titles and bank documents; they have been denied federal loans and training opportunities; and until the 1982 census of agriculture, female farmers were not counted at all. . .

LIC officially opens upgraded facility in Manawatu:

LIC’s semen processing centre in the Manawatu was officially opened this week following an injection of more than $1 million to upgrade the facilities.

LIC, a herd improvement and agritech co-operative, is the country’s largest supplier of artificial breeding (AB) services and dairy genetics.

The refurbishment will enable the dairy farmer-owned co-operative to enhance its export capabilities and use the centre as a back up to its main facilities in Hamilton if required. . . 

Cheaper to travel to Japan than stream the Rugby World Cup:

It will be cheaper for communities in some remote areas of New Zealand to travel to Japan than it will be to stream the Rugby World Cup later this year.

Tim Johnson, CEO of Gravity – New Zealand’s only dedicated satellite broadband provider – says that apart from the challenges of doing homework and running a business in remote areas, capped broadband data rates would make it cheaper for some Kiwi’s to fly to Japan than it would to stream the Rugby World Cup later this year.

For Gravity Internet, who has as one of its shareholders former All Black Andrew ‘Andy’ Ellis, that scenario was intolerable. . . 


Rural round-up

December 11, 2018

Plant a tree grow a community – Luke Chivers:

Matawai farmers Eugene and Pania King are dedicated to sustainability but it isn’t just about the environment. Luke Chivers reports.

Sheep and beef farmers Eugene and Pania King from Kiriroa Station at Matawai are combining their passion for the land with hard work and whanau support.

The couple have a longstanding connection with their family, their environment and their local community.

“We both grew up in rural New Zealand and a career in agriculture was inevitable,” Pania says.  . . 

 

Wee dog helps child farm safety – Alan Williams:

A serious little dachshund and a devil-may-care miniature fox terrier are the heroes in a new book aimed at making children safer on farms.

Ted the foxy races round doing silly things but Poppy is always close by teaching him to put his think-safe brain on.

“They’re both very small and they highlight just how small a child also is on a farm and through them being out and about I’m trying to help children understand about making good decisions,” author Harriet Bremner said. . . 

Farm safety story book launched in wake of tragedy:

A woman who lost her partner in a farm incident has launched a book to keep children safe on the farm.

Harriet Bremner’s partner James died in a farm machinery incident in Hakataramea Valley in January 2017. Now, her new book, Be Safe, Be Seen, sees her miniature dachshund Poppy take on the challenges of keeping safe on the farm as a little dog.

Primary School teacher Harriet hopes that kids will heed the safety messages in the book and that families reading the book to their children will be reminded to make safe choices at work every day. . . 

Fonterra’s strategic reset interacts with new Board dynamics – Keith Woodford:

Fonterra’s December update shows that the strategic reset is under way, albeit at an early stage.

Key indicators include that the Beingmate JV is being unwound and that Fonterra’s China Farms are under heightened scrutiny. The big shock is that Tip Top is on the market. The ownership of Soprole in Chile must also be under scrutiny, although little has been said publicly.

I will return to those issues within this article, but first it is necessary to understand something of the dynamics within the new Fonterra Board. . .

A2 rings in more executive changes under new CEO Hrdlicka – Paul McBeth:

(BusinessDesk) – A2 Milk Co chief executive Jayne Hrdlicka’s executive team is going through more changes as two senior managers depart – one for early retirement and one to pursue another opportunity.

Long-serving executive Simon Hennessy, who is currently general manager international development, will take early retirement. Relative newcomer Michael Bracka, who heads business development in emerging markets, will leave this month to pursue another opportunity, the company said. . . 

Major breakthrough for Mānuka farming initiative:

A ground-breaking milestone could see more Hawke’s Bay farmers producing high-grade mānuka honey worth millions to the New Zealand economy.

Scientifically-bred mānuka cultivars planted on a 130 hectare trial site at Tūtira, Hawke’s Bay between 2011 and 2013 have produced their first crop of mānuka honey with an average Unique Mānuka Factor (UMF®) value of 7. One sample reached medical grade by exceeding UMF® 10. . . 

Dairy and meat products lead manufacturing fall:

A fall in dairy and meat products pushed overall manufacturing sales down for the September 2018 quarter, Stats NZ said today.

After adjusting for seasonal effects, the volume of total manufacturing sales fell 1.6 percent in the September 2018 quarter. This fall was led by a 6.7 percent decrease in meat and dairy product manufacturing.

“Most meat and dairy products in New Zealand are exported and occasionally, the timing of exports, price changes, and exchange rates can affect manufacturing sales,” manufacturing statistics manager Sue Chapman said. . . 


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